TSMC says Arizona fab behind schedule, blames chip geek shortage
Output of 4nm parts stalled until at least 2025
TSMC on Thursday said its under-construction chip fab in Arizona won't be up and running until at least 2025 because of a shortage of skilled workers.
During the Taiwanese giant's Q2 earnings call, CEO Mark Liu acknowledged the biz can't get enough workers to complete the building project on its original timeline. TSMC had hoped to start producing 4nm-node chips at the plant sometime next year.
"Our fab in Arizona started construction in April 2021 with an aggressive schedule. We are now entering a critical phase of handling and installing the most advanced and dedicated equipment," Liu told financial analysts.
"However, we are encountering certain challenges, as there is an insufficient amount of skilled workers with the specialized expertise required for equipment installation in a semiconductor grade facility."
As a stopgap, he added the corporation would send technicians from Taiwan to assist and train local hires to get the project back on track.
TSMC has a lot riding on the fab site – including the prospect of billions of dollars in potential subsidies and tax breaks. Announced in 2020, TSMC envisioned a US factory complex capable of delivering about 20,000 completed wafers a month. However, in the years since, the scope of the project has ballooned from a single $12 billion foundry to a pair of them, with a price tag approaching $40 billion.
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TSMC stands to recoup a sizable portion of this investment following the passage of the US CHIPS and Science Act last summer, which unlocked $53 billion to boost America's chip industry – of which $39 billion is destined for semiconductor incentives. We estimated TSMC could end up with as much as $6 billion in federal subsidies in addition to tax benefits.
But that's only if the Taiwanese chip giant can actually finish building the fabs.
The project hasn't been without its share of problems. Construction at the Arizona site has reportedly been plagued with unsafe working conditions. A report published in The American Prospect last month detailed numerous challenges – including a fire, several injuries, and at least two deaths on the site.
Further complicating things for TSMC is the fact it isn't the only chip shop building fabs in the Phoenix metro area. Intel is also working on a pair of plants at its Ocotillo campus – now valued at $30 billion.
And to the east, Samsung is building a fab in Taylor, Texas, just north of Austin, which is also going to need skilled technicians to install and operate the sensitive equipment inside.
The Register reached out to Intel to ask if it had experienced similar difficulties finding skilled workers necessary to complete construction. We'll let you know if we hear anything back.
The delays come as TSMC reports a 13.7 percent drop in year-over-year revenues, as it contends with a sharp decline in demand for semiconductors. However, the biz says its fortunes are about to change – CFO Wendell Huang forecast higher demand in Q3 as production of 3nm parts ramps up.
Having said that, TSMC may face stiffer competition for 3nm production than anticipated. This week, reports surfaced indicating that Samsung had managed to work out the kinks in its own 3nm and 4nm process nodes. ®